Dwell Time
Understanding and Managing Dwell Time in Shipping Operations
Understanding and Managing Dwell Time in Shipping Operations
What is Dwell Time?
Dwell time is the period a container spends at a terminal from when it is unloaded from a ship until it is picked up and leaves the terminal. Essentially, it’s the time the container “dwells” at the port.
Here’s a more detailed breakdown:
Step 1- Arrival: Dwell time starts when a container is discharged from the vessel and placed in the terminal’s storage area.
Step 2- Storage: The container will remain or wait in the terminal until all necessary paperwork, customs clearance, and other logistical arrangements are completed.
Step 3- Pickup: Dwell time ends when the container is picked up by a truck or other transportation means and exits the terminal. Shortening dwell times can enhance operational efficiency by enabling quicker processing and reducing storage needs.
Why is Dwell Time Important?
1. Cost Implications
- Demurrage and Detention Fees: Long dwell times lead to demurrage charges (for using the terminal beyond free time) and detention charges (for keeping the carrier’s container beyond free time), significantly increasing shipping costs.
- Storage Fees: Containers and packages left at terminals for extended periods also incur storage fees, further adding to the expenses.
2. Operational Efficiency
- Terminal Congestion: In most cases, excessive dwell times contribute to congestion at ports and terminals, hindering the smooth flow of cargo and causing delays in the overall supply chain.
- Asset Utilization: Containers stuck at terminals are not available for reuse, affecting container schedule and availability and potentially leading to shortages. Limited access to efficient terminal operations can exacerbate these issues, impacting operational efficiency and customer satisfaction.
3. Shipping Supply Chain Impact
- Delays and Disruptions: Understanding search behavior can help mitigate delays and disruptions in the supply chain. Prolonged dwell times can disrupt the entire supply chain, causing delivery delays, production interruptions, and, ultimately, customer dissatisfaction.
- Inventory Management: Unpredictable dwell times make it difficult for businesses to manage inventory levels effectively, leading to either overstocking or stockouts.
Factors Affecting Dwell Time
1. Customs Clearance: Delays in customs processing due to incomplete documentation, inspections, or other regulatory procedures can significantly increase dwell time.
2. Terminal Efficiency: The speed and efficiency of terminal operations, including cargo handling, storage, and release processes, directly impact dwell time.
3. Documentation and Paperwork: Inaccurate or incomplete documentation can delay customs clearance and hinder container release.
4. Transportation Availability: The availability and timely arrival of trucks or other modes of transportation to pick up containers play a crucial role in dwell time.
5. Unforeseen Events: External factors like weather events, labor disputes, or unexpected surges in cargo volumes can also contribute to longer dwell times.
Who is Responsible for Dwell Time?
Various factors and responsibilities influence dwell time because it can be shared among different parties involved in the supply chain. Here’s a breakdown of who might be at fault and who is responsible for managing it, along with some specific insights from terminal data:
- Shippers: Delays can occur if the shipper fails to provide the necessary documentation or if the cargo is not ready for pickup. This includes ensuring that all mailing supplies, such as free Priority Mail envelopes and boxes, are available and properly prepared.
- Consignees: The consignee might be responsible for delays if they are not ready to receive the cargo or if they fail to provide the necessary documentation, such as the appropriate envelope size for mailing.
- Carriers: Carriers can contribute to dwell time if there are issues with transportation, such as vehicle breakdowns or scheduling conflicts.
- Terminals: Terminal operators might cause delays due to inefficiencies in handling cargo, lack of equipment, or staffing issues.
By understanding these factors, stakeholders can better manage and reduce dwell time, ensuring a smoother supply chain process.
Shared Responsibility
In reality, dwell time is often a result of multiple interconnected factors, and reducing it requires collaboration among all parties. The following will be necessary:
1. Coordination: Better communication and coordination among terminal operators, customs, shippers, and transport providers can help ensure they are all on the same page regarding information, thereby minimizing delays. Effective collaboration can also improve dwell time metrics, similar to how understanding search result metrics can enhance SEO.
2. Technology: Utilizing advanced tracking and management systems like Terminal49 can provide real-time visibility, helping all parties stay informed and act quickly.
3. Process Improvement: Continuous improvement of processes and procedures by each party involved can lead to more efficient operations and reduced dwell time.
Case Study: How Different Stakeholders Reduce Dwell Times
In 2021, the Port of Los Angeles reported an average dwell time of 6 days for import containers, a significant increase from the pre-pandemic average of 2.5 days. This surge in dwell time was attributed to a combination of factors, including labor shortages, increased cargo volumes, and supply chain disruptions caused by the COVID-19 pandemic. The extended dwell times led to substantial demurrage and detention fees, contributing to higher overall shipping costs for importers and exporters.
Walmart faced significant supply chain delays in 2021 due to high dwell times at major U.S. ports. To mitigate these challenges, Walmart invested in its own private fleet of cargo ships and increased warehouse capacity to ensure the timely delivery of goods. This strategic move helped the business reduce dwell times and maintain adequate inventory levels, ultimately improving customer satisfaction by ensuring products were available on shelves. Additionally, utilizing USPS services for certain shipments can further impact dwell time by offering reliable and cost-effective shipping solutions.
Terminal49 Solutions
Terminal49 offers a comprehensive solution for shippers looking to effectively manage and reduce their dwell time. By providing access to real-time visibility into container status and movements, Terminal49 allows shippers to monitor their cargo from when it is unloaded at the terminal until it exits the port.
This transparency helps shippers quickly identify potential delays in customs clearance, terminal handling, and transportation arrangements. With instant notifications and detailed analytics, shippers can proactively address issues that could extend dwell time, such as incomplete documentation or transportation bottlenecks, ensuring smoother operations and minimizing additional costs. Schedule a Demo
Related glossary terms
Port
A designated area where ships dock to load or unload cargo.
Holds
When a hold is in place, the terminal will not release the container for pickup (“not available”) until they are cleared. The shipper or forwarder is generally responsible for resolving these issues. During this time the countdown to Last Free Day (LFD) continues which can result in demurrage fees.
